Wall Street recedes from highs as quarterly reports loom

(Reuters) - Wall Street fell from record levels on Monday as gains in Microsoft and other technology stocks failed to offset a drop in General Electric and a slide in healthcare stocks.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., October 4, 2017. REUTERS/Brendan McDermid

The S&P healthcare index .SPXHC moved 0.67 percent lower, weighed by a 3.61-percent slide in Medtronic (MDT.N) after the medical device maker warned that its quarterly profit would be impacted after Hurricane Maria hit its operations in Puerto Rico.

The S&P 500 has rallied 14 percent in 2017 and last week hit record highs, buoyed by strong company earnings and enthusiasm that President Donald Trump will cut corporate taxes.

JPMorgan Chase (JPM.N) and Citigroup (C.N) will report profits on Thursday, kicking third-quarter corporate reporting season into high gear as investors look for strong growth to justify pricey valuations.

“Unlike the restaurant chains, movie chains and homebuilders and some of the discretionary stocks hurt by the hurricanes, I don’t expect the banks to be affected by the non-recurring blips during the quarter,” said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma.

Overall, earnings at S&P 500 companies are expected to have increased 4.8 percent last quarter, according to Thomson Reuters data, down from the double-digit growth recorded in the first two quarters of this year.

GE shares (GE.N) sank 3.94 percent after the conglomerate named a new CFO and said it gave activist investment firm Trian Fund Management a board seat.